The cabinet on Friday approved a bill to scale back the planned privatization of state-owned Japan Post Holdings Co, featuring the realignment of its five-company structure into three companies on Oct 1, 2011.

Under the bill that the government aims to enact in June, the deposit cap at its banking unit will be doubled to 20 million yen while the postal group will be obliged to offer ‘‘universal’’ banking and insurance services throughout the country in addition to mail services.

The life insurance coverage limit at Japan Post Insurance will be raised to 25 million yen from 13 million yen, while the insurance arm will be allowed to sell new insurance products, such as cancer insurance.

The bill calls for merging Japan Post Holdings, Japan Post Service and Japan Post Network into a new holding company, which would then place Japan Post Bank and Japan Post Insurance under its wing.

The cabinet on Friday approved a bill to scale back the planned privatization of state-owned Japan Post Holdings Co featuring the realignment of its five-company structure into three companies on Oct 1 2011